Matt Taibbi Eviscerates Former AIG CEO Hank Greenberg For Bringing A Suit Against The Government

Naturally, he's outraged about the whole mess, and he's directing
that outrage at the insurance company's former CEO, Hank Greenberg.

It makes sense. Greenberg is the man who filed the initial suit
on behalf of AIG shareholders alleging that the U.S. government
handled the company's bailout in a manner that was contrary to
their interests.
That argument was dismissed in a NYC Court, but the case was
allowed to proceed in Washington D.C.

That's where AIG's board could join in, if they so choose, after
hearing arguments for and against the suit at a meeting today.

Now here's Taibbi's take:

But here's the funny thing about the lawsuit filed against the
government: It isn't all wrong. In fact, parts of it are quite on
the mark.

The only problem is, the suit is being filed by maybe the
biggest douchebag of all time, Hank Greenberg (and his company,
Starr International), a man who has not only been proven to be
corrupt and a fraud, but who perhaps more than anyone else was
responsible for the galactic balance-sheet goat-f*ck that caused
AIG's implosion in the first place. If there is such a
person as an innocent AIG shareholder who was harmed by the
government's conduct, it sure as hell isn't Hank Greenberg.

Business Insider also pointed out that, during his tenure as
CEO, Greenberg oversaw the creation of the unit that made the
risky bets that brought the company to the brink of collapse.
Taibbi goes into the gory details of all that:

Well, AIG, under Greenberg's watch, had entered into hundreds of
billions of dollars of cosmically stupid credit default swap bets
with all of the biggest banks in the world, essentially taking
book for all of Wall Street, in many cases taking the wrong side
of bets against the mortgage markets, among other things.
Greenberg was dumb enough to allow his subordinate Joe Cassano to
enter into these contracts, which were written in such a way that
if AIG's credit rating were ever to fall, AIG would suddenly owe
its customers billions in cash collateral.

When the ratings agencies started downgrading AIG because of
anxiety over all of the investigations into the company's
accounting, all of those collateral calls started coming due.
Before you knew it, companies like Goldman were demanding more
cash in collateral than AIG had, and when the company was finally
bled dry, that's when the bailout took place.

All that said, Taibbi does grant Greenberg one little piece of
satisfaction. He writes that the powers-that-be on Wall Street
"absolutely did conspire to seize AIG and then use a monstrous
mixture of AIG's assets and public money to keep themselves
alive."

In essence, AIG was the helpless fat guy in the lifeboat
who got eaten when the rest of the survivors ran out of
food.

In a vacuum, perhaps, there might be some sort of claim here, and
there are ordinary people who worked for AIG who were probably
harmed when the state decided not to force companies like Goldman
to take even a 1 percent haircut on their CDS contracts with the
firm. But Hank Greenberg, the guy who started all of this mess by
monkeying with shady reinsurance deals and signing off on the
bank's incredibly irresponsible bookmaking during the pre-crisis
years, is not the guy to bring that claim.